Economist Ian Fletcher: Stop the Korea Free Trade Agreement!

[brentspeak]

http://www.huffingtonpost.com/ian-fletcher/stop-the-korea-free-trade_b_812646.html

You would think America had learned its lesson from NAFTA, which the Labor Department has estimated cost us 525,000 jobs.

But no. President Obama and the Republican leadership are united in pressing for ratification of the Korea-U.S. Free Trade Agreement (KORUS-FTA).* This is an agreement which the Economic Policy Institute http://www.epi.org/economic_snapshots/entry/free_trade_agreement_with_korea_will_cost_u.s._jobs/">estimates will cost us 159,000 more jobs over the next five years.

snip

This agreement, like NAFTA and the dozen or so other free trade agreements America has signed since NAFTA, is fundamentally an offshoring agreement. It is about making it easier for U.S. companies to move work overseas. The provisions to protect workers and consumers are unenforceable window dressing.

Don't be fooled by the fact that some unions, like the United Auto Workers (UAW), have endorsed the agreement. This is part of a cynical ploy by the White House to split the trade union movement in order to keep the AFL-CIO neutral. The UAW's out-of-touch leadership is so punch-drunk from the 2008 collapse of the U.S. auto industry that it has lost touch not only with what is good for the American economy as a whole, but with what is good for rank-and-file auto workers. Don't take my word for it: in the words of Al Benchich, retired president of UAW Local 909:

The UAW Administration Caucus is the one-party state that controls the UAW at the International level. Every International officer is a member of the Caucus, and they surround themselves with appointed international reps that unquestioningly do their bidding.

* Fletcher doesn't mention it here, but the one bone of contention between Obama and the GOP on the trade deals is the issue of TAA (Trade Adjustment Assistance) for workers displaced by the trade deals, a program Obama wants Congress to extend and which the GOP so far refuses to do.

Besides the obvious fact that calling for TAA unintentionally and ironically demonstrates just how the entire premise of the trade deals is a joke in the first place ("to create jobs"), these type of programs have been proven to be http://www.nytimes.com/2009/07/06/us/06retrain.html">mostly ineffective for displaced workers anyway. Furthermore, Obama and the GOP have already agreed in discussions to slash 1/3 of the funding for any proposed TAA. Finally, any trade adjustment assistance granted to displaced workers will only go to laid-off workers whose factories/facilities/companies are found to have been directly affected by the trade deals; no employees of supporting, ancillary industries which go out of business as a result of these job-offshoring agreements will receive any TAA benefits. Needless to say, the same can also be said of everybody else in local economies whose livelihoods are dependent on the physical presence of factories, facilities, etc.

[Armstead]

1. But,but,but....Our President supports it so it must be good

He's fighting for American workers....Fighting to get "retraining assistance" for the workers who will lose their jobs because of the free trade policy is is pushing.

Let's create jobs by destroying jobs.

[no_hypocrisy]

2. It sounded a little too pat last night when the President said he wanted South Koreans to be driving

Chevies.

My first thought was "What's the rest of the deal?"

[ProSense]

3. Well,

"Fletcher doesn't mention it here, but the one bone of contention between Obama and the GOP on the trade deals is the issue of TAA"

...the OP commentary is nine months old, and the negotiations have been ongoing to strengthen the agreements. So there is that.

Here are some more recent items:

With Deal Reached to Extend TAA Before Passing New Trade Pacts, Brown Calls for Swift Action on Bipartisan Currency Manipulation Bill

EPI: THE BENEFITS OF REVALUATION - Full revaluation of the Chinese yuan would increase U.S. GDP and employment, reduce the federal budget deficit, and help workers in China and other Asian countries (PDF)

<...>

Conclusion

If China were to revalue the yuan (or Renminbi) to its equilibrium level, and satellite countries followed suit, U.S. GDP would increase as much as $285.7 billion (1.9%), creating up to 2.25 million U.S. jobs, increasing total U.S. employment by 1.6 percentage points, and reducing the U.S. unemployment rate by at least one full percentage point. This growth would reduce the U.S. budget deficit by up to $71.4 billion per year. These full benefits could be achieved within 18 to 24 months. Over 10 years, full revaluation of the Chinese RMB and other satellite currencies would reduce the federal budget deficit by $621 to $857 billion.

Currency manipulation is also costly for China and other Asian countries that follow China’s lead. These countries are suffering from rapidly rising inflation which is undermining real wages and fueling asset price bubbles. The inflation rate in China reached 5.5% in May 2011; food and oil prices, which make up larger shares of budgets in China than in the United States, have been rising at double digit rates. Full revaluation by China and other currency manipulators such as Hong Kong, Taiwan, Singapore, and Malaysia could lower inflationary pressures and boost the purchasing power of their domestic workers, reducing the threat of future asset bubbles and cooling off these overheated economies. It would also rebalance growth in the global economy, helping to restore demand in the United States, Europe, and other countries where growth has slowed dramatically in the past year.

This is the reason for Vice President Biden's trip to Asia